Rising tensions in the Middle East are pushing oil prices sharply higher, with potentially significant consequences for the global economy and Canadian consumers, says Calgary economist Todd Hirsch.
Hirsch says the conflict involving Iran has rattled energy markets, particularly because of concerns surrounding the Strait of Hormuz, a critical chokepoint through which roughly 20 per cent of global oil exports move. Disruptions or hesitation in tanker traffic through the corridor have driven prices higher amid fears of supply shortages.
West Texas Intermediate crude, the North American benchmark, has climbed from the mid-$50 range at the start of the year to about $78 per barrel, Hirsch notes. He says some analysts believe prices could climb much further if the conflict drags on, with North American crude potentially approaching the low-$90 range if global benchmarks surpass US$100.
Higher oil prices would weigh heavily on fuel-importing regions such as Europe and Asia and could trigger a broader economic slowdown or even recession if sustained, Hirsch says.
For Canadians, rising crude prices are already translating into higher costs at the pump, potentially nearing $2 per litre if oil continues climbing. That would add pressure to households just as inflation has begun to ease.
While higher prices could boost royalty revenues in Alberta and help address the province’s projected $9.4-billion deficit, Hirsch says the broader economic uncertainty underscores what he calls an increasingly unpredictable global environment for governments and businesses alike.
Mario Toneguzzi
Mario Toneguzzi is Managing Editor of Canada’s Entrepreneur. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He was named in 2021 and 2024 as one of the top business journalists in the world by PR News. He was also named by RETHINK to its global list of Top Retail Experts 2024, 2025 and 2026.
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